Stitch Fix (SFIX) Stock Forecast & Price Target

Stitch Fix Inc. is projecting sales for FY26 between $1.28 billion and $1.33 billion, indicating a year-over-year growth of 1% to 5%. The company demonstrated significant improvement in its operating margin, which expanded by 950 basis points in the fourth quarter of FY25, surpassing market expectations. Furthermore, the average order value (AOV) has consistently increased, rising by 12% year-over-year in the fourth quarter and 7.6% year-over-year overall, reflecting the effectiveness of their strategic enhancements in product mix and inventory management.

Stitch Fix Inc. reported a decline in total revenue of 2.6% to $311 million, despite performing better than consensus estimates, indicating potential challenges in maintaining sales growth amidst a shrinking client base. The company's active client count fell 7.9% year-over-year to 2.309 million, reflecting ongoing difficulties in attracting and retaining customers, which raises concerns about future revenue generation. Additionally, the adjusted EBITDA forecast suggests a margin contraction to between 2.3% and 3.4%, down significantly from the prior year's margin of 3.9%, highlighting deteriorating profitability and operational efficiency.